EU Raids London HQ Of Murdoch’s Fox; Documents, Computer Records Seized

Zero Hedge – by Tyler Durden

In a day full of bizarre twist and turns, and not long after the FBI raided the office and home of Trump’s personal lawyer Michael Cohen, moments ago the UK’s Telegraph reported that the British headquarters of the Murdoch entertainment empire 21st Century Fox have been raided by investigators from the European Commission.

As Bloomberg adds, Fox Networks Group was said to be cooperating fully with the commission inspection. 

According to the British press, competition watchdogs gained access to the company’s offices in Hammersmith, west London, early Tuesday to seize documents and computer records. Still, the precise nature of the confidential raid – and investigation – which is believed to be in its early stages, is unclear.

Not that dissimilar to the FBI, the European Commission has powers to raid businesses suspected of abusing their dominance of a market or being involved in a price fixing cartel. Among the permitted actions, investigators are able to take copies of documents and computer records, and ask for explanations from executives.

Sources at the 10 Hammersmith Grove development, which is shared with the tobacco company Philip Morris among others, said Commission officials were attempting to keep a low profile and that staff had been warned to keep details of the raid secret. It is understood that investigators are expected to remain on site through Wednesday and possibly into Thursday.

While the explicit reason for the raid is unclear, one can make an educated guess, especially since the raid comes at a extremely sensitive time for Fox “as it seeks a remedies agreement with British watchdogs at the Competition and Markets Authority (CMA) to secure its heavily delayed takeover of Sky.”

The CMA is considering an offer from the Murdoch family to spin off Sky News into a separate company or sell it to Disney to assuage concerns that full control of Sky will give them too much sway over the British media. The deal has already been approved by the European Commission.

Following an investigation into the impact of full Murdoch control on the public interest in media plurality in the UK, the CMA is due to make recommendations to the Culture Secretary Matt Hancock by next month on whether to allow or block the deal.

News of the European Commission’s competition investigation will be seen as a boost to the US cable giant Comcast, which is seeking to disrupt Fox’s takeover of Sky with its own rival £22bn bid.

To be sure, the stakes are high, especially since Fox has also struck a $66bn deal to sell most of its assets, including Sky, on to Disney. The Murdoch family plans to sell up to focus on US news and sports broadcasting as Hollywood studios race to gain heft to make themselves more to withstand the expected onslaught on entertainment by Silicon Valley tech giants. Any new obstacle in Fox’s bid for Sky could also be seen as an obstacle to the Disney takeover. Fox already faces a potential bidding war with Comcast, which has made an approach for Sky at a 16pc premium to the current Murdoch offer.

The stock of Fox slumped after hours as the news broke.

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